Wiener v. Health Net of Connecticut, Inc.

Citation: 311 F. App'x 438Docket: No. 07-4651-CV

Court: Court of Appeals for the Second Circuit; February 22, 2009; Federal Appellate Court

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Malcolm Wiener and Carolyn S. Wiener, on behalf of their son Jonathan, appeal a September 26, 2007, order from the U.S. District Court for the District of Connecticut, which found that Health Net of Connecticut, Inc. acted arbitrarily and capriciously in denying their claim for growth hormone therapy (GHT) for Jonathan but ruled that remanding the case would be futile. Malcolm Wiener, covered under a group health insurance policy by Health Net, submitted a claim for GHT for Jonathan, who was born small for gestational age and had slow growth. Health Net denied the claim based on a policy exclusion for non-medically necessary growth hormones, a decision upheld by two internal appeals and later by an independent reviewer, IPRO, which identified different grounds.

The court analyzed the case under a standard of review appropriate for ERISA plans that grant discretionary authority to the administrator, determining that Health Net’s decision was arbitrary and capricious. This standard applies when the decision lacks substantial evidence, is unreasonable, or is legally erroneous. The court concluded that Health Net did not adequately investigate discrepancies in Dr. Vogiatzi’s growth rate assessments, failing to resolve whether Jonathan's growth was indeed at the 25th percentile as claimed. Additionally, Health Net did not define the criteria under which GHT would be considered medically necessary for children like Jonathan. Consequently, the court affirmed the ruling that Health Net's denial was arbitrary and capricious, highlighting the inadequacy of Health Net's reasoning in denying the claim.

The district court deemed Health Net’s decision regarding Jonathan’s eligibility for Growth Hormone Therapy (GHT) arbitrary and capricious but concluded that remanding the case for further review would be futile. This conclusion was based on the Independent Panel Review Organization’s (IPRO) findings, which referenced the FDA's approval criteria for GHT in children failing to achieve catch-up growth by age two. The court determined the Wieners had not demonstrated Jonathan's eligibility for GHT under these criteria, labeled the 'FDA standard.' 

The district court noted ambiguity regarding whether the FDA standard is synonymous with medically necessary treatment as outlined in Health Net's policy, which defines medically necessary care according to established good medical practices without specifically referencing the FDA standard. Health Net did not clarify during the administrative review whether the FDA standard governed the medical necessity of GHT, nor did it address this standard in its claim denial. IPRO, while it cited the FDA standard, did not solicit evidence from either party or offer the Wieners a chance to supplement the record, resulting in a lack of evidence concerning the FDA standard in the administrative record.

Given these circumstances, the district court could not make an independent determination regarding the necessity of GHT for Jonathan and thus remanded the case for Health Net to reassess its policy and the Wieners' claim. The court emphasized the need for Health Net to clearly articulate the criteria for medical necessity under its policy and to gather additional evidence, including from the Wieners. The court affirmed part of the district court's judgment while vacating another part, remanding for consistent proceedings. Additionally, the court noted the Supreme Court's recent ruling regarding plan administrators operating under a conflict of interest but did not find it necessary to address this in relation to the appeal.